Frontline has claimed that oil companies were storing “about” 80 million barrels of crude oil at sea, possibly the highest in a quarter of a century. The figure is the highest storage estimate reported to date but shipbroking houses and banks that trade oil and other industry sources believe the total is considerably lower.
“We think it’s about 80 million barrels…but we are not 100% certain,” the acting chief executive officer Jens Martin Jensen (pictured) told Reuters by telephone from Singapore.
Crude oil freight rates have been supported on the majorexport routes by the slew of storage bookings. Tanker firms’ profits are tied to the underlying cost of oil freight.
Mike Wittner of Societe Generale said the Frontline figure fitted the broader oil market picture. “It’s a big number, but its entirely plausible – I don’t see any reason not to believe him,” Wittner told Reuters, adding the upshot was storage is significant and could easily grow even more.
Jens Martin Jensen said 30 to 35 VLCCs and 10 Suezmaxes were being used by oil companies for floating storage in the last few months.
The figures include oil tankers owned by oil majors which were being used to stockpile oil. He said most of the tankers being used for “floating storage” were anchored in the US Gulf, with others laid up in Asia and the Middle East Gulf. “The Iranians have some and others are around Fujairah,” he said.